Jan 18 (Reuters) - Shares of Sophos Group Plc fell 25 percent on Friday, after the cyber security company warned of slightly lower annual billings as hardware and sales to new customers fell.
Sophos, which makes antivirus and encryption products, said constant currency billings, which represents the value of products and services invoiced to customers, rose 2 percent in the third quarter. This compared with a 14 percent rise in the same quarter last year.
The company, whose customers include Under Armour Inc , Xerox Corp, Ford Motor Co and Toshiba Corp, said it expects the “subdued performance” in third quarter to continue into the fourth.
The company’s billings had grown 18 percent, at constant currency, to $769 million in the full year to March 31, 2018.
“This is the third consecutive FY guidance downgrade and it now looks like new product launches will not be able to offset the strong performance in FY’18,” Liberum analyst Alexandre Schmidt, said.
Several cybersecurity firms enjoyed higher demand in the past few years due to high-profile ransomware attacks such as the WannaCry virus and BadRabbit that disrupted factories, hospitals and shops. However, Sophos lost about a third of its value last year in a highly competitive market.
Adjusted operating profit doubled to $33.1 million in the third quarter ended Dec. 31, while revenue rose 7.3 percent to $178 million in the period, primarily helped by its subscription billings.
Sophos shares were down 20.4 percent to 299.4 pence at 0810 GMT. (Reporting by Karina Dsouza and Arathy S Nair in Bengaluru; Editing by Bernard Orr)